4 ms·

How might one make a few bucks from Tether falling apart?

by brandnewlow 9y ago

tehlike 9y ago
Short futures.
- alexeldeib 9y ago
  This seems like a sound approach in general to be honest. If they succeeed, tether should remain 1:1 USD. If they fail, the price declines to 0. So the typical unlimited downside of the short is plausibly negated by their own definition of success.
- SwellJoe 9y ago
  Are there futures on Tethers? One could short Bitcoin, but it's hard to predict how soon this is going to come crashing down. I sold nearly all my cryptocurrency a couple of weeks ago on the belief that Tether would collapse the market, but others sold long before that...and before the massive run up to $10k+. Had those folks shorted back then, they would have had to close their positions...and would have lost a lot of money. Even though they are (I believe) long-term right. I'm just saying be careful with shorting something with unlimited potential upside...like Bitcoin. But, if I could short Tethers, I would, though I don't know who'd take the other side of that deal.
  - tehlike 9y ago
    You are righr, but when tether fails, my assumption is whole crypto will be down big time.
    - dahdum 9y ago
      If tether begins to fail, there will be huge push to sell tethers for BTC/ETH/anything. Couldn't that drive the price up across the board?
      - SwellJoe 9y ago
        Only against USDT. The USDT/BTC price will go through the roof, but what does that matter? USD price will also skyrocket relative to USDT. Anything is worth more than a USDT that's known to be a scam. But, that doesn't make everybody holding non-USDT rich, it just takes a couple billion off the table and puts it in the pocket of the folks running Tether/Bitfinex. The problem isn't so much what individual traders will do when Tether crashes or what that'll do to BTC. It's what Bitfinex/Tether have been doing with the Tethers they've been printing at a few hundred million per week. If we assume most miners sell most of their coins, and if we assume most of the Tethers printed over the past several weeks (well over a billion of them in just the past few weeks) have gone to buying Bitcoin, about half of miner output has been bought with counterfeit money over a long period of time. What happens when half of the upward price pressure disappears overnight, and miner output continues unchanged? I don't think it's alarmist to suggest BTC and much of the rest of the crypto market will drop 50% pretty rapidly. (I am long-term bullish on crypto. Short-term, I'm extremely bearish.) I've seen people make the argument that Tether only accounts for a small percentage of the market cap of BTC, and so if it fails it won't be a big deal. But, when that "small percentage" is able to buy half the new coins coming into circulation day in and day out, you can bet it's able to move the price, and it seems to be what's been propping up the price these past couple of weeks; trends and signals are downward, but every couple days Tether drops another $100 million USDT on the market and, miraculously, BTC gets a bounce and it stays above $10k. I'm not an expert, and I can't predict the future, but I've sold nearly all of my crypto, because this looks absolutely insane, to me. It looks like a blatant and insanely bold con, and I don't want to be one of their marks when they disappear with a few hundred million dollars worth of stolen Bitcoin purchased with money they printed out of thin air.
        tehlike 9y ago
        Market cap is only holders dream. It means nothing. People already have hard time liquidating anything more than 100k, i hear. The float is pretty low. And as you noted miraculously couple days after tether press prints money, bitcoin and most alts jump 10% magically. Combine that with people attributing hundreds or even billions of dollars of market cap to something that doesnt have any tangible use or doesnt even have a github repo, i am goddamn sure tether can and will bring down the whole market down. Technological adoption was the "news following the market" on bitcoins price rise. The real news will be when it explodes. Another thing is bitfinex=tether, so tether imploding means bitfinex becoming insolvent, which will also bring downward price pressure.
  - SwellJoe 9y ago
    I found you can short Tether on Kraken. So, I am (or trying to...it's currently trading at .97 on Kraken, and my sell order is for .99, so if it proves to be solvent in a month or two, I'll be out a few bucks plus margin interest). I have vague concerns that this is like betting against the house since presumably Kraken and other exchanges that accept USDT will be hit hard by the failure of Tether, so they have a strong vested interest in seeing it survive, even if it's shady as hell.
    - tehlike 9y ago
      You beat me to this - a friend just pinged me about the possibility of shorting usdt at kraken for something like 1.8% /month. I did not confirm this myself. I am also not sure if tether fails, what happens to kraken/bittrex etc, will you even be able to take your money out? I doubt. Don't know.
  - deleted 9y ago
    [deleted]
- Blackthorn 9y ago
  I'm constantly wondering if I have the fortitude for this. I've been staring at the Feb BTC futures for a while. I mean, everyone knows that Tether is a scam. But the old phrase about the market remaining irrational longer than you can remain solvent is true. Bitcoin's basically hovered between 10k and 11.5k, for the past while, but this is something that's known for going up tremendously. That takes some fortitude to hold a short position in, that I'm not sure I have.

How might one make a few bucks from Tether falling apart?

tehlike 9y ago

Short futures.

alexeldeib 9y ago
This seems like a sound approach in general to be honest. If they succeeed, tether should remain 1:1 USD. If they fail, the price declines to 0. So the typical unlimited downside of the short is plausibly negated by their own definition of success.
SwellJoe 9y ago
Are there futures on Tethers? One could short Bitcoin, but it's hard to predict how soon this is going to come crashing down. I sold nearly all my cryptocurrency a couple of weeks ago on the belief that Tether would collapse the market, but others sold long before that...and before the massive run up to $10k+. Had those folks shorted back then, they would have had to close their positions...and would have lost a lot of money. Even though they are (I believe) long-term right. I'm just saying be careful with shorting something with unlimited potential upside...like Bitcoin. But, if I could short Tethers, I would, though I don't know who'd take the other side of that deal.
- tehlike 9y ago
  You are righr, but when tether fails, my assumption is whole crypto will be down big time.
  - dahdum 9y ago
    If tether begins to fail, there will be huge push to sell tethers for BTC/ETH/anything. Couldn't that drive the price up across the board?
    - SwellJoe 9y ago
      Only against USDT. The USDT/BTC price will go through the roof, but what does that matter? USD price will also skyrocket relative to USDT. Anything is worth more than a USDT that's known to be a scam. But, that doesn't make everybody holding non-USDT rich, it just takes a couple billion off the table and puts it in the pocket of the folks running Tether/Bitfinex. The problem isn't so much what individual traders will do when Tether crashes or what that'll do to BTC. It's what Bitfinex/Tether have been doing with the Tethers they've been printing at a few hundred million per week. If we assume most miners sell most of their coins, and if we assume most of the Tethers printed over the past several weeks (well over a billion of them in just the past few weeks) have gone to buying Bitcoin, about half of miner output has been bought with counterfeit money over a long period of time. What happens when half of the upward price pressure disappears overnight, and miner output continues unchanged? I don't think it's alarmist to suggest BTC and much of the rest of the crypto market will drop 50% pretty rapidly. (I am long-term bullish on crypto. Short-term, I'm extremely bearish.) I've seen people make the argument that Tether only accounts for a small percentage of the market cap of BTC, and so if it fails it won't be a big deal. But, when that "small percentage" is able to buy half the new coins coming into circulation day in and day out, you can bet it's able to move the price, and it seems to be what's been propping up the price these past couple of weeks; trends and signals are downward, but every couple days Tether drops another $100 million USDT on the market and, miraculously, BTC gets a bounce and it stays above $10k. I'm not an expert, and I can't predict the future, but I've sold nearly all of my crypto, because this looks absolutely insane, to me. It looks like a blatant and insanely bold con, and I don't want to be one of their marks when they disappear with a few hundred million dollars worth of stolen Bitcoin purchased with money they printed out of thin air.
      - tehlike 9y ago
        Market cap is only holders dream. It means nothing. People already have hard time liquidating anything more than 100k, i hear. The float is pretty low. And as you noted miraculously couple days after tether press prints money, bitcoin and most alts jump 10% magically. Combine that with people attributing hundreds or even billions of dollars of market cap to something that doesnt have any tangible use or doesnt even have a github repo, i am goddamn sure tether can and will bring down the whole market down. Technological adoption was the "news following the market" on bitcoins price rise. The real news will be when it explodes. Another thing is bitfinex=tether, so tether imploding means bitfinex becoming insolvent, which will also bring downward price pressure.
- SwellJoe 9y ago
  I found you can short Tether on Kraken. So, I am (or trying to...it's currently trading at .97 on Kraken, and my sell order is for .99, so if it proves to be solvent in a month or two, I'll be out a few bucks plus margin interest). I have vague concerns that this is like betting against the house since presumably Kraken and other exchanges that accept USDT will be hit hard by the failure of Tether, so they have a strong vested interest in seeing it survive, even if it's shady as hell.
  - tehlike 9y ago
    You beat me to this - a friend just pinged me about the possibility of shorting usdt at kraken for something like 1.8% /month. I did not confirm this myself. I am also not sure if tether fails, what happens to kraken/bittrex etc, will you even be able to take your money out? I doubt. Don't know.
- deleted 9y ago
  [deleted]
Blackthorn 9y ago
I'm constantly wondering if I have the fortitude for this. I've been staring at the Feb BTC futures for a while. I mean, everyone knows that Tether is a scam. But the old phrase about the market remaining irrational longer than you can remain solvent is true. Bitcoin's basically hovered between 10k and 11.5k, for the past while, but this is something that's known for going up tremendously. That takes some fortitude to hold a short position in, that I'm not sure I have.